AgDM newsletter article, January 2005

Wildlife Recreation: Rural America 's Newest Billion Dollar Industry *

by Jason R. Henderson, Economist, Center for the Study of Rural America, Federal Reserve Bank of Kansas City, jason.henderson@kc.frb.org

Chart 1: U.S. Wildlife-Related Recreation in 2001

In today's search for the next billion dollar industry to revitalize Main Streets, many rural leaders are again pinning their hopes on nature. New opportunities are not arising from traditional sources commodity industries like agriculture or mining. Tomorrow's opportunity may well be wildlife related recreation - already a $108 billion industry nationwide.

In many rural places, hunting, fishing, and wildlife watching have boosted rural tourism, spurred business growth, and contributed to strong land value gains. The brightest prospects though, still lie ahead. Rural communities fortunate enough to have other amenities to complement their natural resource base are in the best position to reap new economic benefits from this booming industry.

According to the U.S. Fish & Wildlife Service, 82 million people participated in wildlife-related recreation activity in 2001, the latest data available.1 The largest number, roughly 66 million people, took part in wildlife watching. Millions more engaged in fishing and hunting. A significant number of outdoor enthusiasts participated in two or more types of wildlife recreation.

Recreational expenditures

Wildlife recreationers spent $108 billion on wildlife-related recreation expenditures in 2001. To put that in perspective, that amount was more than the total cash receipts of the U.S. livestock industry in the same year.

While wildlife watching was the most popular activity, anglers and hunters still spent the most on wildlife recreation. They spent roughly $70 billion in 1991, compared to $38 billion by wildlife watchers. During the 1990s, hunting dollars surged 29%, while wildlife watching dollars rose 16%.

Wildlife recreationers divided their spending on a variety of goods and services. More than half of their dollars went to equipment purchases. Trip costs - food, lodging, and transportation - accounted for 14% and 10% of wildlife recreation expenditures, respectively. Another 12% came from the leasing or ownership of land for wildlife recreation.

Economic impact

Chart 2: Wildlife-Related Recreation ExpendituresThe industry has made a significant economic impact in rural regions, and many rural places are targeting wildlife recreation as a tourist attraction. Populated states such as Florida and California typically lead the nation in total expenditures on wildlife recreation. Per capita spending was highest in Alaska, Wyoming, Montana, South Dakota, Maine, Idaho, Wisconsin, Vermont, Utah, and Oregon (Chart 2). In addition, many rural states have been able to attract out-of-state tourists for wildlife recreation. For example, Alaska , South Dakota , Wyoming , and Montana have led the nation in per capita expenditures by out-of-state residents for wildlife recreation.

Rural businesses have been the primary beneficiary of the wildlife recreation industry. Cabella's (Sidney, Nebraska) and Bass Pro Shop (Springfield, Missouri) have emerged as leading retailers of wildlife equipment.

These businesses have made huge expansions, both in rural locations and as hubs of urban revitalization. Wildlife recreation is also a factor in the sharp rise in rural land values.

Nonfarmer land purchases

Recreation activities are motivating farmland purchases by nonfarmers. Over half of the ag bankers surveyed in the Kansas City district in 2003 reported that recreation was a reason for investor (nonfarmer) purchases of farmland. In 2001, wildlife recreationers spent over $12 billion on land leasing and ownership.

Higher land values, however, are evidence that wildlife recreation also poses some serious challenges for rural communities. Recreational use may not always be complementary to traditional uses. In addition to higher land costs for farmers, land taken out of agricultural production for recreational use reduces the potential customer base for traditional agricultural service providers. And, wildlife recreation is often a seasonal activity, meaning that additional economic opportunities are needed for the off-season.

Still, wildlife recreation appears to be a growing way to attract wealthy recreationers to rural places. Many of the wildlife recreation participants have above-average income levels and reside in metro areas. For example, over 20% of the people with incomes higher than $35,000 are likely to fish, while less than 15% of those with incomes below $25,000 fished. Metro residents accounted for 59%, 72%, and 76% of hunting, fishing, and wildlifewatchers, respectively.

Tourism opportunities

Wildlife recreation offers even more promise for rural communities with existing entertainment amenities. Tourists, even wildlife recreationers, often prefer places with amenities beyond scenic landscapes and abundant wildlife. They eat at restaurants, sleep in hotels, and visit night spots. As a result, a growing number of hunting resorts that combine entertainment and wildlife are beginning to dot the rural landscape. To help draw customers, many of these resorts also offer off-season activities and promote other types of entertainment in the region. They clearly show that rural places with a regional identity that embraces both entertainment and wildlife amenities are probably in the best position to capture wildlife recreation's dollars.

Nature has always been a strong foundation for rural America . Now, wildlife recreation appears to be the newest opportunity. The industry may not be the answer for every rural community, but those with entertainment and wildlife may be able to leverage Mother Nature to spark new growth.

1/ National Survey of Fishing, Hunting, & Wildlife-Associated Recreation, U.S. Fish & Wildlife Service.

* Reprinted with permission, The Main Street Economist, April 2004, Center for the Study of Rural America, Federal Reserve Bank of Kansas City

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